“There is clearly a valuable role for intermediaries in Asia”

By EyeforTravel.com Correspondent in Singapore

Favourable industry dynamics and significant investment in building brands, technology and CRM are among the factors, which are projected to propel intermediaries to success in Asia.

Ram Seethepalli, group vice president and managing director, Consumer International Markets, Asia, Cendant TDS, one of the speakers in the inaugural session of the Travel Distribution Summit Asia 2006, being held in Singapore, said, “The region is simply too large, too diverse, and too fragmented for the direct channel to cost effectively reach the full universe of potential customers on thier own.”

On why intermediaries will succeed in Asia, he said, “Consumers are driving changes (like shopping – price is the number one driver, detailed information, choice, consumer opinions often matter more than brand). Intermediaries have made significant investments in building brands, technology and CRM. Intermediaries are at the forefront of internet marketing (search engine optimisation and pay-per click) and favourable industry dynamics – emergence of low-cost carriers and lack of significant branded hotels.”

“The launch of a significant number of LCC’s across the region has led to consumers increasingly exploring and gaining comfort with the direct channel distribution - and online in particular.  This trend will, and should, continue.  Suppliers should be garnering an increasing stake through the direct channel and thereby successfully reducing their distribution costs.  However, there is clearly a valuable role for the indirect / intermediary channel in the Asian markets,” he said.

On partnerships between suppliers and intermediaries, he said, “Develop a committed relationship; Long-term perspective; Win-Win (or not Win-Lose); Work through problems together; and Complex exchange of value.”

In the same session, Tim Davis, senior vice-president – commercial development and information services, Hilton International said, “Going forward, brands are going to be important in this fast growing, confusing in some cases, market. We have to ensure price consistency for consumer confidence. We are also going to invest massively in investment to leverage and grow commercial dynamics.”

On key factors in distribution for the company, he said, “(We consider) expansion of our reach, cost of sales and most importantly, does distribution allows our brand to compete freely, allowing consumers to get maximum choice.”

Stefan Leser, executive vice-president – corporate development, Kuoni Group, said, “We observe markets and consumers are very different. No one can answer how distribution will look in future in Asia.”